The U.S. is shutting down the $8 billion black market for Venezuelan oil

Partial oil blockade by the US President Donald Trump threatens to destroy the $8 billion-a-year black market for Venezuelan oil. This was reported by The Wall Street Journal. About 70% of Venezuela's oil exports are carried out by a fleet of vessels under sanctions from the U.S. Treasury Department, which have now become a target for the U.S. military.

Venezuela has long used the same playbook as Russia and Iran to circumvent U.S. sanctions on its oil industry – using a shadow fleet of aging vessels to transport crude oil to customers.

According to Venezuelan economist Asdrubal Oliveros, tankers under sanctions account for about 70% of Venezuela's oil exports. Most of it is shipped to Asian buyers who pay in cryptocurrencies. Losing access to this network of vessels would reduce Venezuela's revenues by about $8 billion a year.

Some sanctioned tankers have already turned around to avoid the US Navy flotilla in the Caribbean. Last week, the US military seized the vessel Skipper with 1.9 million barrels of Venezuelan oil, which was en route to Cuba.

According to TankerTrackers.com, about 75 tankers are in Venezuelan waters, half of them blacklisted by the Treasury Department as sanctions violators. About two dozen are typically used to export crude oil.

U.S. officials have called the operation a quarantine rather than a blockade, as legitimate tankers will have free passage to Venezuela. A true blockade is considered an act of war under international law.

Venezuela is more vulnerable to an oil embargo because it is not a military power like Russia or Iran, which also face tough US oil sanctions.

Nicolás Maduro and his aides condemned the US actions, calling them part of an effort to overthrow the government and plunder Venezuela's oil reserves, some of the largest in the world.

"The trade of our oil and all our natural resources will continue. For centuries, the sovereign people of Venezuela will be the absolute owners of the land and all its riches," Maduro said in a speech on Wednesday.

Trump said that Maduro must step down and that his "days are numbered."

To transport oil, Venezuela uses a so-called shadow fleet of 900 vessels, first created by Iran more than a decade ago during sanctions, and then by Russia after the start of the war in Ukraine.

The network uses old tankers, which sometimes falsely sail under the flag of another country, transfer oil between vessels to conceal its origin, and turn off their transponders.

Venezuela produces about 900,000 barrels of oil a day — a far cry from its peak of 3.5 million barrels in the late 1990s. Now, the only oil leaving the country without sanctions is being transported by Chevron, which has a narrow exemption from U.S. financial restrictions.

• November 24, Washington recognized Maduro and his allies in the government are members of a foreign terrorist organization.
• On December 10, Trump reported that his country had seized the largest tanker off the coast of Venezuela.
• On December 17, it was reported that the US introduced a complete blockade of all sanctioned oil tankers entering Venezuela or departing from its ports.